b) Discuss two specific allocation rules (equity theories or equity positions) being relevant for health care services.
c)According to a version of the Grossman model, the (first-order) condition describing an individual’s optimal choice of health stock (H) is as follows:
W = the wage rate
= The marginal productivity of health
= Lagrange multiplier (shadow price)
P = Price per unit of medical services
E = Educational level (stock of knowledge)
= Discount rate (interest rate)
= Depreciation rate
Why does the wage rate (W) affect the demand for health?